Mortgage rules in West Virginia: closing practice, homestead, recording tax, licensing and default
West Virginia folds most home loans into its Consumer Credit and Protection Act, which strips prepayment penalties, demands a notice of right to cure, and bars a loan that exceeds the home’s fair market value. What follows is the state layer — the rules that sit on top of TILA, RESPA and the federal servicing regime when the property is in West Virginia.
| Closing practice | Attorney closing state |
|---|---|
| Community property | No — common-law (separate property) state |
| Mortgage recording tax | West Virginia charges no mortgage tax or intangible tax on the note; the county clerk collects a flat recording fee for the deed of trust. |
| Transfer tax (deed) | West Virginia’s excise tax on real property transfers is $1.10 per $500 for the state plus $1.10 per $500 for the county (0.44% combined; some counties charge more), customarily paid by the seller. |
| Usury ceiling | West Virginia’s general usury limit is 8%, but business-purpose loans above $20,000 and most loans secured by real estate above statutory thresholds are exempt; hard money lenders lend to entities or above the thresholds and confirm the exemption with counsel. |
| Foreclosure | Non-judicial · 1 to 3 months to sale · deficiency: allowed |
How a West Virginia closing is conducted
West Virginia closings are customarily conducted by attorneys, who search the title in the county clerk’s office, prepare the deed and deed of trust, issue the title policy as agent and disburse the funds; title companies operate mostly through lawyer agents. Funding is wet, and the deed of trust is recorded with the county clerk right after closing. Attorney settlement fees are usually a few hundred dollars plus the title examination.
Who has to sign: community property and homestead joinder
West Virginia is an equitable-distribution, separate-property state, so a home titled to one spouse stays that spouse’s property until divorce; dower and curtesy were abolished, so a non-borrowing spouse technically need not sign a deed of trust on property held solely by the other. Lenders still ask both spouses to sign when the home is the marital residence, and married couples commonly hold title with survivorship. The spouse’s separate debts do not count against the borrower.
West Virginia has two homestead shields: a small recorded homestead under Code chapter 38, article 9, rooted in the state Constitution, and the $25,000 residence exemption in Code § 38-10-4 that applies in bankruptcy (doubled when both spouses file); verify whether the legislature has raised these figures, as they are revisited periodically. Neither prevents a deed of trust, a tax lien or a lien for improvements from being enforced. For property taxes, the Homestead Exemption under article X, § 1b of the Constitution removes the first $20,000 of assessed value for owners 65 and older or permanently disabled, and owner-occupied homes are assessed in Class II at a lower rate.
Taxes and fees at recording
West Virginia charges no mortgage tax or intangible tax on the note; the county clerk collects a flat recording fee for the deed of trust. The transfer tax on the deed, an excise tax of $1.10 per $500 for the state plus a county share of the same order (Code § 11-22-2), is paid by the seller and does not depend on the loan amount.
West Virginia’s excise tax on real property transfers is $1.10 per $500 for the state plus $1.10 per $500 for the county (0.44% combined; some counties charge more), customarily paid by the seller.
Can a West Virginia lender charge a prepayment penalty?
The West Virginia Consumer Credit and Protection Act gives a borrower the right to prepay a consumer loan in full at any time without penalty (Code § 46A-3-110), and the Act’s definition of consumer loan reaches most residential mortgages made to West Virginia homeowners, so prepayment penalties are effectively unavailable on the ordinary home loan. Whether a particular first mortgage falls inside or outside the Act depends on its rate and purpose, a point worth checking with the Division of Financial Institutions.
High-cost and predatory lending limits
West Virginia relies on federal HOEPA thresholds but adds its own conduct rules in the Residential Mortgage Lender, Broker and Servicer Act, Code § 31-17-8, which among other things forbids a primary or subordinate loan whose total secured debt exceeds the fair market value of the home, restricts balloon payments and flipping, and limits points and fees on certain loans. The Consumer Credit and Protection Act in chapter 46A supplies damages and defenses for unconscionable terms, and West Virginia courts have applied it aggressively against lenders.
West Virginia’s general usury limit is 8%, but business-purpose loans above $20,000 and most loans secured by real estate above statutory thresholds are exempt; hard money lenders lend to entities or above the thresholds and confirm the exemption with counsel.
Licensing: the West Virginia regime
The West Virginia Division of Financial Institutions licenses mortgage lenders, brokers and servicers under Code chapter 31, article 17 (the Residential Mortgage Lender, Broker and Servicer Act) and mortgage loan originators under article 17A, the state SAFE Act, with applications processed through the NMLS. Banks and credit unions hold separate charters, business-purpose loans are outside the Act, and an individual financing the sale of their own home occasionally is generally exempt. NMLS Consumer Access shows current licensees.
West Virginia-specific notices, periods and disclosures
West Virginia’s Consumer Credit and Protection Act requires the lender to send a notice of right to cure before accelerating a consumer loan (Code § 46A-2-106), giving the borrower a short window to pay the arrears, and the same Act restricts collection conduct. Trustee sales under Code chapter 38, article 1 need published notice and mailed notice to the owner before the auction. The state adds no rescission period to the federal right, but its fair-market-value lending limit means a loan that exceeds appraised value is vulnerable to challenge from the start.
Default and foreclosure: the West Virginia path
Default in West Virginia leads to a non-judicial foreclosure, usually 1 to 3 months from the first notice or filing to the sale. A West Virginia lender may sue the borrower for the deficiency remaining after a trustee’s sale. West Virginia provides no statutory right of redemption after a trustee’s sale. The full timeline, redemption and mediation rules are on foreclosure in West Virginia; the investor view — usury, licensing exemptions, recovery speed — on hard money in West Virginia.
Frequently asked questions
Do I need a lawyer to close a mortgage in West Virginia?
West Virginia closings are customarily conducted by attorneys, who search the title in the county clerk’s office, prepare the deed and deed of trust, issue the title policy as agent and disburse the funds; title companies operate mostly through lawyer agents. Lenders generally follow the prevailing practice of the county; a borrower who wants legal review can add it at their own expense.
Does West Virginia allow prepayment penalties on home loans?
The West Virginia Consumer Credit and Protection Act gives a borrower the right to prepay a consumer loan in full at any time without penalty (Code § 46A-3-110), and the Act’s definition of consumer loan reaches most residential mortgages made to West Virginia homeowners, so prepayment penalties are effectively unavailable on the ordinary home loan. Under the federal ATR/QM rule, prepayment penalties are banned on most loans and tightly capped on the few fixed-rate qualified mortgages that may carry them.
What does West Virginia charge to record a mortgage?
West Virginia charges no mortgage tax or intangible tax on the note; the county clerk collects a flat recording fee for the deed of trust. West Virginia’s excise tax on real property transfers is $1.10 per $500 for the state plus $1.10 per $500 for the county (0.44% combined; some counties charge more), customarily paid by the seller.
Who licenses mortgage lenders in West Virginia?
The West Virginia Division of Financial Institutions licenses mortgage lenders, brokers and servicers under Code chapter 31, article 17 (the Residential Mortgage Lender, Broker and Servicer Act) and mortgage loan originators under article 17A, the state SAFE Act, with applications processed through the NMLS. Every individual originator must also hold an NMLS identifier, printed on the application and the Loan Estimate; it can be checked on NMLS Consumer Access.
Federal layer: TILA / Reg Z · RESPA · TRID disclosures · ECOA · Fair Housing Act · all federal regulations. Buying here: first-time buyer programs in West Virginia.